Russian War Against Ukraine: Energy Dimension | DiXi Group Alert – weekly review

February 5 – 11

Summary

As of February 12, 386 settlements remained without electricity due to hostilities and technological disruptions.
Namely, on the night of February 12, Russia launched another drone strike on the energy infrastructure, damaging equipment at an Ukrenergo substation in the Dnipropetrovsk region. Over 53,000 consumers were left without electricity supply.
February 7 missile strikes on Kyiv resulted in damage to two 110 kV high-voltage lines, with substations, 19,400 consumers and healthcare facilities offline. The attack also disconnected a section of the district heating network, leaving 355 residential buildings, 5 healthcare and 27 educational institutions, and 84 public buildings without heat supply.
While visiting the occupied Zaporizhzhia NPP, the IAEA Director General Rafael Grossi noted that the site has lost external power supply eight times – the last time in December – and switched to back-up diesel generators.
Electricity exports increased 7 times to 10.2 GWh; imports increased by 3% to 34.8 GWh. Ukrenergo prepares to launch joint auctions with TSOs of Hungary (February 22) and Slovakia (March 4), which will be held on the JAO platform.
For the first time in a long period, electricity prices in the markets of Eastern Europe were lower than in Ukraine. The ratio between the Base DAM indices in Poland, Hungary, Romania, Slovakia and Ukraine ranged from 0.70 to 0.97.
In 2023, the total volume of electricity sales and purchases on the DAM increased by 14% yearon-year to 20,750.4 GWh, but did not reach the pre-war level. Also, market concentration ratio (CR5) is high both among buyers (77%) and sellers (74%).
The Verkhovna Rada adopted in the first reading draft law No.9456, which provides for the settlement of customs clearance of biomethane.
GTSOU announced a reduction in the use of natural gas as fuel by 33% in 2023, and of natural gas for technological processes by 59%. One of the likely reasons was reduction of transit volumes by 28% YoY (to 14.65 bcm).
According to the media, LPG imports from Poland with signs of Russian origin amounted to 8,790 tons in the first five weeks of 2024, which is 17% of the total volume of imports.
The Cabinet of Ministers approved the basic standards for the share of SOEs’ profits to be paid as dividends based on the 2023 results. For Naftogaz, this share is set at 95%, for Ukrhydroenergo – at 50%, for Ukrnafta – at 30%. The government recommended paying part
of dividends in advance by February 29.
The Procedure for recalculating the cost of utility services for the period of non-performance, incomplete performance or inadequate quality was adopted.
The government approved the Action Plan for the implementation of the European Commission’s recommendations presented in the Ukraine Progress Report within the 2023 Enlargement Package. The plan defines more than 350 measures for all negotiating chapters.
The Cabinet of Ministers also allocated almost 4.5 billion UAH in subventions to local budgetsin 11 regions to rebuild social and critical infrastructure through 136 projects.
Sweden has allocated 26.4 million EUR to support energy efficiency projects in Ukraine through the E5P Fund.